The U.S. Commerce Department on Friday finalized a $6.6 billion subsidy for Taiwan Semiconductor Manufacturing Co. (TSMC) to expand chip production in Phoenix, Arizona. This marks the first major deal under the $52.7 billion CHIPS and Science Act of 2022.
TSMC will invest $65 billion in Arizona, adding a third fab by 2030. The second fab, set to produce advanced 2-nanometer chips by 2028, will use TSMC’s cutting-edge “A16” manufacturing process.
The agreement includes up to $5 billion in loans, milestone-based payments, and profit-sharing with the U.S. government. TSMC also agreed to pause stock buybacks for five years.
Commerce Secretary Gina Raimondo hailed the deal as essential for national security, ensuring leading-edge technology is manufactured domestically. While addressing export controls, she emphasized the dual strategy of boosting U.S. production and restricting advanced technology shipments to China.
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